The thought may have crossed your mind at some point: what if you find a great job in another state, or your current company transfers you - should you sell your house, or rent it out? There are a few factors to consider before a big decision such as this.
Some Reasons to Keep Your Home
Think about the reasons for keeping ownership of your current home. Do you like it enough to hold on to it in case you move back? Are you hoping to keep a tax break through property depreciation? Do you want to use that home as a retirement investment?
These are all good reasons for retaining your home ownership, but there are other factors to consider that may outweigh the advantages. For example, are you ready to be a long-distance landlord - or hiring a company to maintain and manage the property for you? There are also several other costs involved, such as advertising, turning costs (cleaning and painting between tenants), taxes, insurance, utilities when your property is between tenants, etc. In order to assess these costs, you should do some research of the costs in your market. Expenses can be up to 30 to 40 percent of income before your mortgage cost.
Some Facts About Property Rental
If you decide to rent out your house, you may wonder where to start. First, I recommend getting the home in good shape so you can get the highest dollar amount for rent. You should fix the interior and exterior walls - patching and painting, clean or replace flooring/carpet, fix or replace appliances and whatever else needs fixing.
Once that is done, you need to set the correct rent for the area. Location is king when setting prices. You may want to contact a property management company to research prices in the area, or you can ask a local Realtor for some advise. If you set your price too high, you will likely have a hard time finding a tenant.
Should You Hire a Property Management Company?
Hiring a property manager is not essential, but it can make your life a little easier, especially if you are moving out of the state. You should interview at least three companies, and be sure to ask about their experience, references, tenant screening, maintenance, eviction handling, insurance, and any special services they offer.